Delta Market Update - May 2017

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Written by Charles C. Smith, Jr., Chairman

Published: 31 May 2017

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A May Overview

After a three-month reprieve, the markets look as though they have found their footing. Domestic and most international equity markets have moved to new highs. Interest rates have stayed relatively low and this has acted as a catalyst for investors. There are a few things that stand out to us about this market and the global economies:

Europe has overtaken economic leadership from the US. In the first quarter of 2017, Europe’s economy grew at an annualized 2% rate, which outstripped the US economy at 0.7%. It’s good to see that Europe is finally picking up steam.

A wide disparity in interest rates exists around the world. In the US, the FED has started raising rates and will diligently continue raising for the foreseeable future. In Europe, the EU has kept rates down. This trend may change if Europe continues to improve.

Unknowns remain with the new administration. President Trump is attempting to lower tax rates and it appears the domestic equity markets are pricing that in. If rates are not reduced, it could cause a dip in stocks.

We are encouraged by what we see in the global economies. For the first time in a long time, the rest of the world seems to be waking up. This type of global improvement could help sustain growth and create a more consistent environment for development.

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